Food, Drink, Fuels and Household Supplies Contributed much to Inflation in Third Quarter

Food and drink, fuels and other household supplies accounted for 85.8 per cent of the inflation in the October to December period, according to the Quarterly Monetary Policy Report released by the Bank of Jamaica (BoJ), recently.
Inflation for the quarter was 6.4 per cent as stated by the Governor of the BoJ, Derick Latibeaudiere, at the quarterly press briefing held on February 10 at the bank. Within food and drink, the main impulses emanated from expansions of 32.1 per cent in starchy foods; 23.8 per cent in vegetables, fruits and meats, and 4 per cent in poultry and fish, respectively. The movement in starchy foods, according to the report, was mainly due to increases in the prices of green bananas and tubers, such as yams, potatoes and dasheen. With respect to vegetables and fruits, the main price increases related to tomatoes, cabbage, escallion, carrots, pumpkins and oranges. Poultry and fish prices were also affected by Hurricane Ivan, resulting in significant damage to fish ponds, fishing vessels and equipment, as well as chicken farms. Second round impulses from starchy foods, vegetables and fruits and meat, poultry and fish were primarily reflected in increased prices of “meals away from home”.
The report further stated that in the category of ‘Fuels and other Household Supplies’, there were increases in the prices of household supplies, as householders made preparation and recovery efforts due to the Hurricane. These supplies included consumer items such as powdered soap, candles and batteries, among others. Upward adjustments in the prices of kerosene and cooking gas were the main items of note affecting fuels. For the quarter, fuels and other household supplies, which had a weight of 7.4 per cent in the Consumer Price Index (CPI)basket, accounted for 12.1 per cent of overall inflation. The main impetus in ‘Housing and other Housing expenses’ was primarily influenced by an average increase of 5.3 per cent in electricity rates in the quarter.
This stemmed from an increase of 11.8 per cent in the fuel rate, which reflected lagged effects of the upward movements in international oil prices.